Cell Tower Lease Terminations

Would you invest in a cell tower lease knowing that the carrier paying the rent can cancel anytime with 30 days notice. Then why do some firms specialize in buying these leases?
These is an interesting question. Give me a call and I’ll explain.

Are Lease Terminations Real?

The first question is, is cell tower lease termination real? You bet. This is a piece from a typical cell site lease, "This agreement may be terminated, without penalty or further liability, as follows: a) by either party on thirty (30) days prior written notice..."

The telecom buyout industry is just a little over a quarter century old. In this short period of time there have been some major consolidations, causing many to suffer the unimaginable, lease termination. Let me report a few that affected many: Cingular and AT&T merger may ultimately affect between 8,000 and 20,000; Sprint & Nextel merger could cost 20,000 lease holders' their monthly checks; Verizon and Alltel merger could eventually end as many as 10,000 tower terminations. Chances are you will not be affected.

What is Peace of Mind Worth?

I can tell you that during my short tenure working as a cell site acquisition executive I've run across several used-to-be cell tower landlords that lost their leases due to redundancy and or technology improvements. What is peace of mind worth?

You might want to get a free quote or even get some bids just to see what your tower or rooftop lease is worth. Read Cell Tower Values or get some actionable bids at no cost unless you accept one of the offers.

Are Buyout Firms Afraid of Terminations?

Why do the telecom buyout firms want to purchase a cell site that may have the possibility of termination? Because they do their homework and know how much 'risk/reward' the cell site is worth to them. All in all, they figure they will lose about 3% of their portfolio due to cell site terminations. There will be more terminations in the future due to continued carrier consolidations and improvements in cellular technology. Many more will be approached by so called 'lease reduction' companies, but that's a different story for another time.

About Cell Tower

Verizon Wireless has built more cell towers than any other cellular carrier. The leases are considered the 'gold standard' when it comes to tower buyouts.